WEST VIRGINIA CODE

WVC 33 - 8 - 2
§33-8-2. Definitions.
The following terms are defined for purposes of this article:

(1) "Acceptable collateral" means:

(A) As to securities lending transactions and for the purpose
of calculating counter party exposure amount, cash, cash
equivalents, letters of credit, direct obligations of, or
securities that are fully guaranteed as to principal and interest
by, the government of the United States or any agency of the United
States, or by the federal national mortgage association or the
federal home loan mortgage corporation, and as to lending foreign
securities, sovereign debt rated 1 by the securities valuation
office ("SVO") of the national association of insurance
commissioners;

(B) As to repurchase transactions, cash, cash equivalents and
direct obligations of, or securities that are fully guaranteed as
to principal and interest by, the government of the United States
or an agency of the United States, or by the federal national
mortgage association or the federal home loan mortgage corporation;
and

(C) As to reverse repurchase transactions, cash and cash
equivalents.

(2) "Acceptable private mortgage insurance" means insurance
written by a private insurer protecting a mortgage lender against
loss occasioned by a mortgage loan default and issued by a licensed
mortgage insurance company, with an SVO 1 designation or a rating issued by a nationally recognized statistical rating organization
equivalent to an SVO 1 designation, that covers losses to an eighty
percent loan-to-value ratio.

(4) "Accident and sickness insurer" means a licensed life or
sickness insurer or health service corporation whose insurance
premiums and required statutory reserves for accident and sickness
insurance constitute at least ninety-five percent of total premium
considerations or total statutory required reserves, respectively.

(5) "Admitted assets" means assets permitted to be reported

as admitted assets on the statutory financial statement of the
insurer most recently required to be filed with the commissioner,
but excluding assets of separate accounts, the investments of which
are not subject to the provisions of this article.

(6) "Affiliate" means, as to any person, another person that,
directly or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with the
person.

(7) "Asset-backed security" means a security or other
instrument, excluding a mutual fund, evidencing an interest in, or
the right to receive payments from, or payable from distributions on, an asset, a pool of assets or specifically divisible cash flows
which are legally transferred to a trust or another special purpose
bankruptcy-remote business entity, on the following conditions:

(A) The trust or other business entity is established solely
for the purpose of acquiring specific types of assets or rights to
cash flows, issuing securities and other instruments representing
an interest in or right to receive cash flows from those assets or
rights and engaging in activities required to service the assets or
rights and any credit enhancement or support features held by the
trust or other business entity; and

(B) The assets of the trust or other business entity consist
solely of interest bearing obligations or other contractual
obligations representing the right to receive payment from the cash
flows from the assets or rights. However, the existence of credit
enhancements, such as letters of credit or guarantees, or support
features such as swap agreements, does not cause a security or
other instrument to be ineligible as an asset-backed security.

payments to the buyer, with each payment based on the amount by
which a reference price or level or the performance or value of one or more underlying interests exceeds a predetermined number,
sometimes called the strike rate or strike price.

(10) "Capital and surplus" means the sum of the capital and
surplus of the insurer required to be shown on the statutory
financial statement of the insurer most recently required to be
filed with the commissioner.

(11) "Cash equivalents" means short-term, highly rated and

highly liquid investments or securities readily convertible to
known amounts of cash without penalty and so near maturity that
they present insignificant risk of change in value. Cash
equivalents include government money market mutual funds and class
one money market mutual funds. For purposes of this definition:

(A) "Short-term" means investments with a remaining term to
maturity of ninety days or less; and

(B) "Highly rated" means an investment rated "P-1" by Moody's
Investors Service, Inc., or "A-1" by Standard and Poor's division
of the McGraw Hill Companies, Inc., or its equivalent rating by a
nationally recognized statistical rating organization recognized by
the SVO.

(12) "Class one bond mutual fund" means a mutual fund that

at all times qualifies for investment using the bond class one
reserve factor under the purposes and procedures of the securities
valuation office of the national association of insurance
commissioners, or any successor publication.

(13) "Class one money market mutual fund" means a money market mutual fund that at all times qualifies for investment using the
bond class one reserve factor under the purposes and procedures of
the securities valuation office or any successor publication.

(14) "Collar" means an agreement to receive payments as the

buyer of an option, cap or floor and to make payments as the seller
of a different option, cap or floor.

(15) "Commercial mortgage loan" means a loan secured by a
mortgage, other than a residential mortgage loan.

(16) "Construction loan" means a loan of less than three years
in term, made for financing the cost of construction of a building
or other improvement to real estate, that is secured by the real
estate.

(17) "Control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting
securities, by contract (other than a commercial contract for goods
or nonmanagement services), or otherwise, unless the power is the
result of an official position with or corporate office held by the
person. Control will be presumed to exist if a person, directly or
indirectly, owns, controls, holds with the power to vote or holds
proxies representing ten percent or more of the voting securities
of another person. This presumption may be rebutted by a showing
that control does not exist in fact. The commissioner may
determine, after furnishing all interested persons notice and an
opportunity to be heard and making specific findings of fact to support the determination, that control exists in fact,
notwithstanding the absence of a presumption to that effect.

(18) "Counterparty exposure amount" means:

(A) The net amount of credit risk attributable to a derivative
instrument entered into with a business entity other than through
a qualified exchange, qualified foreign exchange, or cleared
through a qualified clearinghouse ("over-the-counter derivative
instrument"). The amount of credit risk equals:

(i) The market value of the over-the-counter derivative
instrument if the liquidation of the derivative instrument would
result in a final cash payment to the insurer; or

(ii) Zero if the liquidation of the derivative instrument
would not result in a final cash payment to the insurer.

(B) If over-the-counter derivative instruments are entered
into under a written master agreement which provides for netting of
payments owed by the respective parties and the domiciliary
jurisdiction of the counterparty is either within the United States
or if not within the United States, within a foreign jurisdiction
listed in the purposes and procedures of the securities valuation
office as eligible for netting, the net amount of credit risk will
be the greater of zero or the net sum of:

(i) The market value of the over-the-counter derivative
instruments entered into under the agreement, the liquidation of
which would result in a final cash payment to the insurer; and

(ii) The market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of
which would result in a final cash payment by the insurer to the
business entity.

(C) For open transactions, market value will be determined at
the end of the most recent quarter of the insurer's fiscal year and
will be reduced by the market value of acceptable collateral held
by the insurer or placed in escrow by one or both parties.

(19) "Covered" means that an insurer owns or can immediately
acquire, through the exercise of options, warrants or conversion
rights already owned, the underlying interest in order to fulfill
or secure its obligations under a call option, cap or floor it has
written, or has set aside under a custodial or escrow agreement
cash or cash equivalents with a market value equal to the amount
required to fulfill its obligations under a put option it has
written, in an income generation transaction.

(20) "Credit tenant loan" means a mortgage loan which is made
primarily in reliance on the credit standing of a major tenant,
structured with an assignment of the rental payments to the lender
with real estate pledged as collateral in the form of a first lien.

(21) "Derivative instrument" means an agreement, option,
instrument or a series or combination of those instruments:

(A) To make or take delivery of, or assume or relinquish, a
specified amount of one or more underlying interests, or to make a
cash settlement in lieu thereof; or that has a price, performance,
value or cash flow based primarily upon the actual or expected price, level, performance, value or cash flow of one or more
underlying interests.

(B) Derivative instruments include options, warrants used in
a hedging transaction and not attached to another financial
instrument, caps, floors, collars, swaps, forwards, futures and any
other agreements, options or instruments substantially similar to
those instruments or any series or combination thereof and any
agreements, options or instruments permitted under rules adopted
under section eight of this article. Derivative instruments does
not include an investment authorized by sections eleven through
seventeen, inclusive, nineteen and twenty-four through thirty,
inclusive, of this article.

(22) "Derivative transaction" means a transaction involving
the use of one or more derivative instruments.

(23) "Direct" or "directly", when used in connection with an
obligation, means that the designated obligor is primarily liable
on the instrument representing the obligation.

(24) "Dollar roll transaction" means two simultaneous
transactions with different settlement dates no more than
ninety-six days apart, so that in the transaction with the earlier
settlement date, an insurer sells to a business entity, and in the
other transaction the insurer is obligated to purchase from the
same business entity substantially similar securities that are
asset-backed securities issued, assumed or guaranteed by the
government national mortgage association, the federal national mortgage association or the federal home loan mortgage corporation
or their respective successors.

(25) "Domestic jurisdiction" means the United States, Canada,
any state, any province of Canada or any political subdivision of
any of those jurisdictions.

(26) "Equity interest" means any of the following that are

not rated credit instruments:

(A) Common stock;

(B) Preferred stock;

(C) Trust certificates;

(D) Equity investment in an investment company other than a

money market mutual fund or a class one bond mutual fund;

(E) Investment in a common trust fund of a bank regulated by
a federal or state agency;

(F) An ownership interest in minerals, oil or gas, the rights
to which have been separated from the underlying fee interest in
the real estate where the minerals, oil or gas are located;

(G) Instruments which are mandatorily, or at the option of the
issuer, convertible to equity;

(H) Limited partnership interests and those general
partnership interests authorized under subdivision (4), section
five of this article;

(I) Member interests in limited liability companies;

(J) Warrants or other rights to acquire equity interests that
are created by the person that owns or would issue the equity to be acquired; or

(K) Instruments that would be rated credit instruments except
for the provisions of paragraph (B), subdivision (70) of this
section.

(27) "Equivalent securities" means:

(A) In a securities lending transaction, securities that are
identical to the loaned securities in all features including the
amount of the loaned securities, except as to certificate number if
held in physical form, but if any different security will be
exchanged for a loaned security by recapitalization, merger,
consolidation or other corporate action, the different security
shall be considered to be the loaned security;

(B) In a repurchase transaction, securities that are identical
to the purchased securities in all features including the amount of
the purchased securities, except as to the certificate number if
held in physical form; or

(C) In a reverse repurchase transaction, securities that are
identical to the sold securities in all features including the
amount of the sold securities, except as to the certificate number
if held in physical form.

(28) "Floor" means an agreement obligating the seller to make
payments to the buyer in which each payment is based on the amount
by which that a predetermined number, sometimes called the floor
rate or price, exceeds a reference price, level, performance or
value of one or more underlying interests.

(29) "Foreign currency" means a currency other than that of a
domestic jurisdiction.

(30) "Foreign investment" means an investment in a foreign
jurisdiction, or an investment in a person, real estate or asset
domiciled in a foreign jurisdiction, that is substantially of the
same type as those eligible for investment under this article,
other than under sections seventeen and thirty of this article. An
investment will not be considered to be foreign if the issuing
person, qualified primary credit source or qualified guarantor is
a domestic jurisdiction or a person domiciled in a domestic
jurisdiction, unless:

(A) The issuing person is a shell business entity; and

(B) The investment is not assumed, accepted, guaranteed or

insured or otherwise backed by a domestic jurisdiction or a person,
that is not a shell business entity, domiciled in a domestic
jurisdiction.

(C) For purposes of this definition:

(i) "Shell business entity" means a business entity having no
economic substance, except as a vehicle for owning interests in
assets issued, owned or previously owned by a person domiciled in
a foreign jurisdiction;

(ii) "Qualified guarantor" means a guarantor against which an
insurer has a direct claim for full and timely payment, evidenced
by a contractual right for which an enforcement action can be
brought in a domestic jurisdiction; and

(iii) "Qualified primary credit source" means the credit
source to which an insurer looks for payment as to an investment
and against which an insurer has a direct claim for full and timely
payment, evidenced by a contractual right for which an enforcement
action can be brought in a domestic jurisdiction.

(31) "Foreign jurisdiction" means a jurisdiction other than a
domestic jurisdiction.

(32) "Forward" means an agreement (other than a future) to
make or take delivery of, or effect a cash settlement based on the
actual or expected price, level, performance or value of, one or
more underlying interests.

(33) "Future" means an agreement, traded on a qualified
exchange or qualified foreign exchange, to make or take delivery
of, or effect a cash settlement based on the actual or expected
price, level, performance or value of, one or more underlying
interests.

(A) Invests only in obligations issued, guaranteed or insured
by the federal government of the United States or collateralized
repurchase agreements composed of these obligations; and

(B) Qualifies for investment without a reserve under the
purposes and procedures of the securities valuation office or any
successor publication.

(35) "Government-sponsored enterprise" means a:

(A) Governmental agency; or

(B) Corporation, limited liability company, association,
partnership, joint stock company, joint venture, trust or other
entity or instrumentality organized under the laws of any domestic
jurisdiction to accomplish a public policy or other governmental
purpose.

(36) "Guaranteed or insured", when used in connection with

an obligation acquired under this article, means that the guarantor
or insurer has agreed to:

(A) Perform or insure the obligation of the obligor or
purchase the obligation; or

(B) Be unconditionally obligated until the obligation is
repaid to maintain in the obligor a minimum net worth, fixed charge
coverage, stockholders' equity or sufficient liquidity to enable
the obligor to pay the obligation in full.

(37) "Hedging transaction" means a derivative transaction
which is entered into and maintained to reduce:

(A) The risk of a change in the value, yield, price, cash flow
or quantity of assets or liabilities which the insurer has acquired
or incurred or anticipates acquiring or incurring; or

(B) The currency exchange rate risk or the degree of exposure
as to assets or liabilities which an insurer has acquired or
incurred or anticipates acquiring or incurring.

(44) "Investment company" means an investment company as
defined in Section 3(a) of the Investment Company Act of 1940, as
amended, and a person described in Section 3(c) of that act.

(45) "Investment company series" means an investment portfolio
of an investment company that is organized as a series company and
to which assets of the investment company have been specifically
allocated.

(46) "Investment practices" means transactions of the types
described in sections sixteen, eighteen, twenty-nine or thirty-one
of this article.

(47) "Investment subsidiary" means a subsidiary of an insurer engaged or organized to engage exclusively in the ownership and
management of assets authorized as investments for the insurer if
each subsidiary agrees to limit its investment in any asset so that
its investments will not cause the amount of the total investment
of the insurer to exceed any of the investment limitations or avoid
any other provisions of this article applicable to the insurer. As
used in this subdivision, the total investment of the insurer shall
include:

(A) Direct investment by the insurer in an asset; and

(B) The insurer's proportionate share of an investment in an
asset by an investment subsidiary of the insurer, which shall be
calculated by multiplying the amount of the subsidiary's investment
by the percentage of the insurer's ownership interest in the
subsidiary.

(49) "Letter of credit" means a clean, irrevocable and
unconditional letter of credit issued or confirmed by, and payable
and presentable at, a financial institution on the list of
financial institutions meeting the standards for issuing letters of
credit under the purposes and procedures of the securities
valuation office or any successor publication. To constitute acceptable collateral for the purposes of sections sixteen and
twenty-nine of this article, a letter of credit must have an
expiration date beyond the term of the subject transaction.

(50) "Limited liability company" means a business
organization, excluding partnerships and ordinary business
corporations, organized or operating under the laws of the United
States or any state thereof that limits the personal liability of
investors to the equity investment of the investor in the business
entity.

(A) As to cash and letters of credit, the amounts of the cash
and letters of credit; and

(B) As to a security as of any date, the price for the
security on that date obtained from a generally recognized source
or the most recent quotation from such a source or, to the extent
no generally recognized source exists, the price for the security
as determined in good faith by the parties to a transaction, plus
accrued but unpaid income on the security to the extent not
included in the price as of that date.

(54) "Money market mutual fund" means a mutual fund that meets
the conditions of 17 code of federal regulations par. 270.2a-7, under the Investment Company Act of 1940, as amended or renumbered.

(55) "Mortgage loan" means an obligation secured by a
mortgage, deed of trust, trust deed or other consensual lien on
real estate.

(56) "Multilateral development bank" means an international
development organization of which the United States is a member.

(57) "Mutual fund" means an investment company or, in the case
of an investment company that is organized as a series company, an
investment company series that, in either case, is registered with
the United States securities and exchange commission under the
Investment Company Act of 1940, as amended.

(58) "NAIC" means the national association of insurance
commissioners.

(59) "Obligation" means a bond, note, debenture, trust
certificate including an equipment certificate, production payment,
negotiable bank certificate of deposit, bankers' acceptance, credit
tenant loan, loan secured by financing net leases and other
evidence of indebtedness for the payment of money (or
participations, certificates or other evidences of an interest in
any of the foregoing), whether constituting a general obligation of
the issuer or payable only out of certain revenues or certain funds
pledged or otherwise dedicated for payment.

(60) "Option" means an agreement giving the buyer the right to
buy or receive (a "call option"), sell or deliver (a "put option"),
enter into, extend or terminate or effect a cash settlement based on the actual or expected price, level, performance or value of one
or more underlying interests.

(61) "Person" means an individual, a business entity, a
multilateral development bank or a government or quasi-governmental
body, such as a political subdivision or a government-sponsored
enterprise.

(63) "Preferred stock" means preferred, preference or
guaranteed stock of a business entity authorized to issue the
stock, that has a preference in liquidation over the common stock
of the business entity.

(64) "Qualified bank" means:

(A) A national bank, state bank or trust company that at all
times is no less than adequately capitalized as determined by
standards adopted by United States banking regulators and that is
either regulated by state banking laws or is a member of the
federal reserve system; or

(B) A bank or trust company incorporated or organized under
the laws of a country other than the United States that is
regulated as a bank or trust company by that country's government
or an agency of the government and that at all times is no less
than adequately capitalized as determined by the standards adopted
by international banking authorities.

(65) "Qualified business entity" means a business entity that is:

(A) An issuer of obligations or preferred stock that are rated
1 or 2 by the SVO or an issuer of obligations, preferred stock or
derivative instruments that are rated the equivalent of 1 or 2 by
the SVO or by a nationally recognized statistical rating
organization recognized by the SVO; or

(B) A primary dealer in United States government securities,
recognized by the Federal Reserve Bank of New York.

(66) "Qualified clearinghouse" means a clearinghouse for, and
subject to the rules of, a qualified exchange or a qualified
foreign exchange, which provides clearing services, including
acting as a counterparty to each of the parties to a transaction so
that the parties no longer have credit risk as to each other.

(67) "Qualified exchange" means:

(A) A securities exchange registered as a national securities
exchange, or a securities market regulated under the Securities
Exchange Act of 1934, as amended;

(B) A board of trade or commodities exchange designated as a
contract market by the commodity futures trading commission or any
successor thereof;

(B) That is, or its members are, subject to the jurisdiction
of a foreign futures authority that has received regulatory
comparability relief under CFTC rule 30.10 (as set forth in
appendix C to part 30 of the CFTC's regulations, 17 C.F.R. part 30)
as to futures transactions in the jurisdiction where the exchange,
board of trade or contract market is located; or

(C) Upon which foreign stock index futures contracts are
listed that are the subject of no-action relief issued by the
CFTC's office of general counsel, provided that an exchange, board
of trade or contract market that qualifies as a "qualified foreign
exchange" only under this subdivision shall only be a "qualified
foreign exchange" as to foreign stock index futures contracts that
are the subject of no-action relief.

(69) "Rated credit instrument" means:

(A) A contractual right to receive cash or another rated
credit instrument from another entity which:

(i) Is rated or required to be rated by the SVO;

(ii) In the case of an instrument with a maturity of three
hundred ninety-seven days or less, is issued, guaranteed or insured
by an entity that is rated by, or another obligation of the entity
is rated by, the SVO or by a nationally recognized statistical
rating organization recognized by the SVO;

(iii) In the case of an instrument with a maturity of ninety
days or less, is issued by a qualified bank;

(iv) Is a share of a class one bond mutual fund; or

(v) Is a share of a money market mutual fund.

(B) However, "rated credit instrument" does not mean:

(i) An instrument that is mandatorily, or at the option of the
issuer, convertible to an equity interest; or

(ii) A security that has a par value and whose terms provide
that the issuer's net obligation to repay all or part of the
security's par value is determined by reference to the performance
of an equity, a commodity, a foreign currency or an index of
equities, commodities, foreign currencies or combinations thereof.

(70) "Real estate" means:

(A) Real property, including: Interests in real property,
such as leaseholds, minerals and oil and gas that have not been
separated from the underlying fee interest; improvements and
fixtures located on or in real property; and the seller's equity in
a contract providing for a deed of real estate.

(B) As to a mortgage on a leasehold estate, real estate shall
include the leasehold estate only if it has an unexpired term (including renewal options exercisable at the option of the lessee)
extending beyond the scheduled maturity date of the obligation that
is secured by a mortgage on the leasehold estate by a period equal
to at least twenty percent of the original term of the obligation
or ten years, whichever is greater.

(71) "Replication transaction" means a derivative transaction
that is intended to replicate the performance of one or more assets
that an insurer is authorized to acquire under this article. A
derivative transaction that is entered into as a hedging
transaction will not be considered a replication transaction.

(72) "Repurchase transaction" means a transaction in which an
insurer purchases securities from a business entity that is
obligated to repurchase the purchased securities or equivalent
securities from the insurer at a specified price, either within a
specified period of time or upon demand.

(73) "Required liabilities" means total liabilities required
to be reported on the statutory financial statement of the insurer
most recently required to be filed with the commissioner.

(74) "Residential mortgage loan" means a loan primarily
secured by a mortgage on real estate improved with a one-to-four
family residence.

(75) "Reverse repurchase transaction" means a transaction in
which an insurer sells securities to a business entity and is
obligated to repurchase the sold securities or equivalent
securities from the business entity at a specified price, either within a specified period of time or upon demand.

(77) "Securities lending transaction" means a transaction in
which securities are loaned by an insurer to a business entity that
is obligated to return the loaned securities or equivalent
securities to the insurer, either within a specified period of time
or upon demand.

(78) "Series company" means an investment company that is
organized as a series company, as defined in rule 18f-2(a) adopted
under the Investment Company Act of 1940, as amended.

(79) "Sinking fund stock" means preferred stock that:

(A) Is subject to a mandatory sinking fund or similar
arrangement that will provide for the redemption (or open market
purchase) of the entire issue over a period not longer than forty
years from the date of acquisition; and

(B) Provides for mandatory sinking fund installments (or open
market purchases) commencing not more than ten and one-half years
from the date of issue, with the sinking fund installments
providing for the purchase or redemption, on a cumulative basis
commencing ten years from the date of issue, of at least two and
one-half percent per year of the original number of shares of that
issue of preferred stock.

(A) An instrument that is structured so that, if it is held
until retired by or on behalf of the issuer, its rate of return,
based on its purchase cost and any cash flow stream possible under
the structure of the transaction, may become negative due to
reasons other than the credit risk associated with the issuer of
the instrument; however, a rated credit instrument will not be a
special rated credit instrument under this subdivision if it is:

(i) A share in a class one bond mutual fund;

(ii) An instrument, other than an asset-backed security, with
payments of par value fixed as to amount and timing, or callable
but in any event payable only at par or greater, and interest or
dividend cash flows that are based on either a fixed or variable
rate determined by reference to a specified rate or index;

(iii) An instrument, other than an asset-backed security, that
has a par value and is purchased at a price no greater than one
hundred ten percent of par;

(iv) An instrument, including an asset-backed security, whose
rate of return would become negative only as a result of a
prepayment due to casualty, condemnation or economic obsolescence
of collateral or change of law;

(v) An asset-backed security that relies on collateral that
meets the requirements of subparagraph (ii) of this paragraph, the
par value of which collateral:

(I) Is not permitted to be paid sooner than one half of the
remaining term to maturity from the date of acquisition;

(II) Is permitted to be paid prior to maturity only at a
premium sufficient to provide a yield to maturity for the
investment, considering the amount prepaid and reinvestment rates
at the time of early repayment, at least equal to the yield to
maturity of the initial investment; or

(III) Is permitted to be paid prior to maturity at a premium
at least equal to the yield of a treasury issue of comparable
remaining life; or

(vi) An asset-backed security that relies on cash flows from
assets that are not prepayable at any time at par, but is not
otherwise governed by subparagraph (v) of this paragraph, if the
asset-backed security has a par value reflecting principal payments
to be received if held until retired by or on behalf of the issuer
and is purchased at a price no greater than one hundred five
percent of such par amount.

(B) An asset-backed security that:

(i) Relies on cash flows from assets that are prepayable at
par at any time;

(ii) Does not make payments of par that are fixed as to amount
and timing; and

(iii) Has a negative rate of return at the time of acquisition
if a prepayment threshold assumption is used with the prepayment
threshold assumption defined as either:

(I) Two times the prepayment expectation reported by a
recognized, publicly available source as being the median of expectations contributed by broker dealers or other entities,
except insurers, engaged in the business of selling or evaluating
the securities or assets. The prepayment expectation used in this
calculation shall be, at the insurer's election, the prepayment
expectation for pass-through securities of the federal national
mortgage association, the federal home loan mortgage corporation,
the government national mortgage association or for other assets of
the same type as the assets that underlie the asset-backed
security, in either case with a gross weighted average coupon
comparable to the gross weighted average coupon of the assets that
underlie the asset-backed security; or

(II) Another prepayment threshold assumption specified by the
commissioner by rule promulgated under section eight of this
article.

(C) For purposes of paragraph (B) of this subdivision, if the
asset-backed security is purchased in combination with one or more
other asset-backed securities that are supported by identical
underlying collateral, the insurer shall calculate the rate of
return for these specific combined asset-backed securities in
combination. The insurer must maintain documentation demonstrating
that the securities were acquired and are continuing to be held in
combination.

(81) "State" means a state, territory or possession of the
United States of America, the District of Columbia or the
Commonwealth of Puerto Rico.

(82) "Substantially similar securities" means securities that
meet all criteria for substantially similar specified in the NAIC
accounting practices and procedures manual, as amended, and in an
amount that constitutes good delivery form as determined from time
to time by the public securities administration.

(83) "SVO" means the securities valuation office of the NAIC
or any successor office established by the NAIC.

(84) "Swap" means an agreement to exchange or to net payments
at one or more times based on the actual or expected price, level,
performance or value of one or more underlying interests.

(85) "Underlying interest" means the assets, liabilities,
other interests or a combination thereof underlying a derivative
instrument, such as any one or more securities, currencies, rates,
indices, commodities or derivative instruments.

(86) "Unrestricted surplus" means the amount by which total
admitted assets exceed one hundred twenty-five percent of the
insurer's required liabilities.

(87) "Warrant" means an instrument that gives the holder the
right to purchase an underlying financial instrument at a given
price and time or at a series of prices and times outlined in the
warrant agreement. Warrants may be issued alone or in connection
with the sale of other securities, for example, as part of a merger
or recapitalization agreement, or to facilitate divestiture of the
securities of another business entity.

Note: WV Code updated with legislation passed through the 2016 Regular Session
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